Category Archives: Economic development

An article in yesterday’s Electronic News notes that the fiscal 2008 U.S. quota for H-1B visas — which allow scientists, engineers, computer programmers and other skilled workers from around the world to to work here for limited periods — was filled in just two days.

Visa applications were accepted starting April 2, and within two days the U.S. Citizenship and Immigration Services (USCIS) received about 150,000 applications — more than twice the maximum 65,000 new visas alotted for the entire upcoming year. An additional 20,000 applicants with a US-earned masters or higher degree are considered exempt from the cap, but the USCIS is not sure yet how many of the initial rush of applicants met that criteria.

Meanwhile, I’d estimate that close to one-fourth of the enrollment in my children’s Colorado schools these days are the children of illegal Mexican and Central American immigrants (that’s just the illegals — the total Latino school-age population is closer to 40%). These are not, for the most part, the children of H-1B applicants.

You can’t blame these families for wanting to come here, where the jobs are plentiful and the quality of life is far better than in their own poverty-stricken countries. Yet this influx of illegal immigrants is putting a real strain on our schools, health care and law enforcement systems.

You have to wonder what U.S. immigration policies (or the lack thereof) are trying to accomplish.

Clearly there are legitimate questions that need to be addressed about the efficacy and aims of the H-1B program, which if not properly regulated could depress wages and cost the jobs of U.S. scientists and engineers.

On the other hand, our universities simply aren’t turning out enough top-notch graduates in these fields, at least not graduates with U.S. citizenship, and the only way many of our companies are getting by is by recruiting foreign scientists and engineers.

Boulder venture capitalist Brad Feld, for one, says he’s constantly trying to find enough qualified software developers for companies he’s investing in. “There is just no reason why there should be a quota on this type of H-1B visa,” he writes in his Feld Thoughtsblog.

What’s more beneficial to the U.S. economy — skilled scientists and engineers who boost the productivity and innovation of our knowledge-based economy, or the mostly uneducated throngs that pour across our southern border in search of menial labor?

Why are the best and brightest applicants limited to a relative trickle, while the doors are thrown virtually wide open for millions of the world’s poor, huddled masses?

Immigration is a complex, emotional issue that could emerge as a major factor in next fall’s presidential elections. And I don’t pretend to have all, or even most, of the answers.

But it’s time for us to begin dealing rationally with the nearly insatiable desire of foreign nationals to work here, and U.S. companies’ eagerness to employ them. Surely we can be smarter and more deliberate about harnessing that supply and demand, and directing this remarkable influx of human talent towards goals that further the best interests of the United States.

When it comes to biotech, Colorado Springs tends to be overshadowed by the bigger life-sciences industry clusters up the road in Denver and Boulder. But the Springs’ biotech industry appears to be building momentum.

This week a new chapter of the Colorado Bioscience Association (CBSA) launched in Colorado Springs, with support from the University of Colorado at Colorado Springs (UCCS) and the Colorado Springs Economic Development Corp. (EDC).

The group, which met for the first time Wednesday, aims to provide support to existing bioscience companies, help recruit new ones and work with UCCS to commercialize new technologies.

“With over 25 bioscience companies already here and more in the pipeline, we will continue to invest in this industry,” says EDC CEO Mike Kazmierski. “We see it as a vital part of our future.”

Today, for the second time in two years, the American Electronics Association (AeA) issued a strident call for U.S. education reform, greater investment in basic science and technology research and a more lenient visa system to encourage the world’s best and brightest engineers and entrepreneurs to come here to pursue their careers.

In a report entitled “We are still losing the competitive advantage” (see full pdf copy here, or executive summary here), the Santa Clara, Calif-based organzation noted that although awareness of America’s lagging tech competitiveness appears to have increased, very little actual progress has been made.

Congress introduced numerous bills during the last session calling for visa reform, increased R&D investment and improved science, technology, engineering, and math education. But as the report notes: “Not one of these bills was passed or ever seriously debated.”

In a letter accompanying the report, AeA CEO William Archey and Chairman Timothy Guertin describe the United States as “the proverbial frog in the pot of water, oblivious to the slowly rising temperature of a world catching up to us. Today, the heat is still rising and we are still in the pot. There is hope that we are finally feeling the heat and are poised to do something about it. Hope, but not certainty.”

Numerous signs of declining U.S. competitiveness are evident right here in the Mile-High state.

Today’s AeA’s report on U.S. competitiveness offers two tiers of public-policy recommendations, ranked in order of priority.

The first tier suggests immediate changes that already have been introduced in various bills and appear to have widespread bipartisan support. The second tier is more challenging, having generally not yet been introduced as legislation, or having the same degree of bipartisan support. Nonetheless, the group describes these longer-range measures as “equally critical” to long-term American competitiveness.

Support and increase research and development
• Increase federal funding for physical science, engineering, math, and computer science basic research through the National Science Foundation, the National Institute of Standards and Technology, the Department of Energy, and the Department of Defense
• Strengthen the R&D tax credit and make it permanent

Enact High-skilled visa reform
• Lower barriers for high-skilled individuals to get temporary work visas
• Give green cards to all U.S.-educated master and doctoral students

2nd Tier Recommendations:

Create a more business-friendly environment in the U.S.
• Reduce the “onerous and disproportionate” tax that small- and medium-size companies incur by complying with Section 404 of the Sarbanes-Oxley Act
• Address rising health-care costs through initiatives such as electronic medical records
• Fully fund the U.S. Patent and Trademark Office to reduce lag time between patent filing and approval

Promote broadband diffusion
• Offer industry incentives to promote broadband diffusion
• Ensure affordable broadband access for every American within five years

A parting thought from the report:

“When one of America’s strongest competitive advantages in the global marketplace is a knowledge-based economy, it does not bode well for the future when the United States neglects the infrastructure that supports its wealth creation.”

In at least a temporary setback to the state’s technology industry, Colorado lawmakers on Thursday killed a proposed bill that would have required all high school students to take four years of math and three years of science before graduating. Many schools now require only two years of each subject.

Although few if any tech executives spoke in favor of the bill, SB-131, the presidents of the University of Colorado and Colorado State University supported the bill, saying that state high schools are graduating students that do not meet their universities’ entrance requirements, much less those of top-tier schools such as Stanford and Harvard.

The bill’s sponsors — Sen. Josh Penry, R-Grand Junction and Rep. Rob Witwer, R-Genessee — noted correctly that the United States is losing its edge in engineering and science to other countries, particularly China and Japan. They contend that raising high school math and science requirements would help reverse that trend.

Opponents, however, argued against what they saw as a piecemeal approach to revising school standards one or two subjects at a time, and worried that other programs such as art or foreign languages might be shortchanged.

Clearly, both sides of this argument have merit. If we expect to prepare our future generations to succeed in a global economy, we simply must raise the bar in education.

But Colorado has traditionally given local school districts a great deal of control over curriculum and other priorities. That’s not something to be dismissed lightly.

There’s also the problem of legislators creating yet another unfunded mandate for state public schools, which already are struggling to recover from years of inadequate funding, while also trying to comply with numerous existing state and federal program and testing requirements.

Perhaps the statehouse isn’t the best place from which to be increasing high school math and science requirements. But that doesn’t mean the change doesn’t need to be made.

Rep. Nancy Todd, D-Aurora, is sponsoring an alternate bill, HB-1118. It would require the state board of education to adopt minimum high school graduation guidelines, which local districts would then be expected to use to establish graduation requirements tailored to their own communities’ specific needs.

Let’s hope the legislature sees fit to support this more flexible approach.

Boulder edged out Salt Lake City in a recent ranking of the top U.S. second-tier cities for venture capital investment.

The two cities took the top spots for the number of VC deals completed from 2003 through mid 2005. The rankings were part of a Federal Reserve Bank of Boston study (pdf copy here) of how venture capital investments are distributed outside of the traditional VC hot spots of Silicon Valley, Boston, New York City, Texas, and Los Angeles.

Source: Initiative for a Competitive
Inner City. Cities ranked by number
of private equity deals per city.

Actual deal numbers were not disclosed, so there’s no way to tell how much of a lead the two cities had over other locales.

The rankings were in an article that focused mainly on the economic importance of venture capital, and how New England secondary cities can attract more of it.

The authors — Prabal Chakrabarti and Carole Carlson — identified six factors that help top secondary cities attract more venture capital than their peers:

Clusters and Networks. “Geographic concentrations of interconnected companies, specialized suppliers and service providers” in particular fields were deemed the most valuable factor, along with personal networks and professional societies.

Investor Presence. Also key was having an already established investor presence, including “angel” investors.

Historical Returns. Not surprisingly, the ability to attract reason-
able returns on investments was important, while below-average returns were found (duh!) to deter investment.

Intellectual Capital and Technology Transfer. There was a strong correlation between deal flow and the presence of national research universities.

Community Attractiveness. Quality of life also was strongly correlated with the ability to attract venture capital.

Accessibility. Direct transportation links to major funding centers was important in helping VCs find and vet deals, as well as serve as company board members and mentors.

The good news for Boulder is that it appears to have plenty of the “secret sauce” needed to attract serious venture capital players.

The bad news? All secondary cities combined received just 13% of the deals and 20% of total investment dollars, despite having 51% of the U.S. population, 49% of the number of business establishments, and 38 percent of the U.S. payroll.

So don’t uncork the champagne yet. There’s plenty of work still to do if Boulder — and the rest of Colorado — hope to break into the ranks of the country’s truly top-tier VC capitals.

The Creative Generalist blog yesterday posted a fascinating interview with Adrian Chernoff, the Chief Creative Officer of Ideation Genesis, an innovation company based in Boulder.

Chernoff — a mechanical engineer whose varied career has included stints at General Motors, Disney, NASA and the Sandia and Los Alamos national laboratories — has generated 50 U.S. patents and 12 international patents. He’s worked on everything from new and improved rubber bands (Rubber Bandits™) to theme park rides to cars of the future, and says he’s currently developing a new drink product.

For some thought-provoking ideas on creativity, the process of innovation and the importance of patents, check out this timely article. Also, check out Chernoff’s Muzz.com website, which celebrates the contributions of people like the Muppets’ Jim Henson and inventor Nikola Tesla, whose ideas have changed the world.

New factories are always helpful. But let’s never forget that it’s creative, entrepreneurial individuals like Chernoff that will truly power Colorado’s tech economy into the next century.